Taiwan's central bank announced a hike in interest rates by 12.5 basis points yesterday, marking the fourth time since the second quarter of last year.

The current rediscount rate will be 1.75 percent. Central bank said that the adjustment is made amid Taiwan's continuing economic growth and rising inflationary pressure, and the adjustment will help to stabilize commodity prices.

Although the Directorate-General of Budget, Accounting and Statistics forecasts this year's economic growth rate at 4.92%, the Central Bank of the Republic of China decided to raise its discount rate to 1.75% in light of rising global raw material prices and the impact of the Japanese earthquake and tsunami.

It was the Central Bank's fourth rate hike since last June, and officials say that they hope the adjustment will stabilize commodities prices and the financial market.

In regards to the real estate market, the Central Bank says that no new measures will be implemented for the time being due to the effectiveness of second mortgage restrictions and the proposed luxury tax.

According to the Ministry of Finance, the National Tax Administration is currently investigating the tax implications of pre-sale house transfers.

With the MOF handling the luxury tax and the 40% pre-sale house tax rate, the Central Bank can focus on battling inflation.